Oil prices soar following the imposition of new sanctions to Iran, one of the major crude exporters. The renewed sanctions came into force early on Tuesday.
Washington is reimposing “snapback” sanctions following Trump’s decision to pull the States out of the 2015 Iran nuclear Deal (JCPOA). The concept behind the decision, according to the US President, was to curb Iran’s nuclear program.
Trump ignored pleas by the European allies to preserve the deal and Iran warnings that US would regret its decision. Although many countries, including U.S. allies, oppose the sanctions as well. However, the U.S. administration said it wants as many countries as possible to stop buying Iranian oil. USA has plans to reintroduce more damaging sanctions on Iranian oil in November.
Thus, as the global supply tightens analysts expect that oil prices will further increase since Iran is the world’s fifth-largest oil producer. Traders are seen weighing bullish factors, including potential supply disruptions to Iranian crude exports.
Of course, President Trump tweeted about US sanctions on Iran:
The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!
— Donald J. Trump (@realDonaldTrump) August 7, 2018
Forex Market – Oil prices soar
The Dollar remained almost unchanged at 95.345 against its major traded rivals, trading mostly flat. Some analysts see trade tensions supporting the greenback which gained against emerging-market currencies.
The Euro was weak trading at $1,558 following German industrial orders fall, which was more than expected in June. However, the common currency bounced from 6-week lows in the previous session.
The Yen strengthened against the USD ahead of US-Japan bilateral trade talks on Thursday.
The Australian Dollar headed higher, 0.5%, to a 1-week peak after the Reserve Bank of Australia’s interest rate decision.
The Sterling rose 0.2% bouncing back from Monday’s 11-month low caused by reports about no-deal Brexit and lack of transition agreement. However, forex experts say that British pound’s recovery is not permanent. It remained almost unchanged against the single currency.
Oil prices soared following US sanctions on Iran. Brent crude oil futures increased by 50 cents.
Gold prices edged up significantly and silver prices inched up 0.17% an ounce as US Dollar stayed firm.
Sources: Reuters, CNN money, bbc
PLEASE NOTE The information above is not investment advice.